This paper details how logistics service providers need to step up their game and not be afraid of digitization, and how to secure leading market positions for years to come. By Arthur D. Little
The wind of change is blowing strongly in transportation & logistics.
Digitization is in full swing: it is opening a whole portfolio of new opportunities to reduce costs, differentiate product offerings and redefine business models.
Digital freight platforms are driving the transformation.
The narrow focus on clearly delineated market segments currently restricts their disruption potential.
However, the longterm effect on the industry can be immense, as other sectors have shown.
Various players have entered the race for tomorrow’s leading market position in transportation & logistics.
Digital innovators were at the forefront of this development, and now established providers are in reaction mode. Some joined the race early on, some joined later, and others are still evaluating how to play in this new field.
Few providers have embedded their actions into coherent, wellconceived digital game plans.
Many are adopting “me-too” strategies. Launching yet another digital freight exchange will not do it for established players.
Others have already advanced significantly on the learning curve, and the industry is swamped with digital platforms by now. At the same time, M&A and cooperation options are limited: established players have already acquired or entered alliances with the most promising new entrants.
Strategic options for logistics service providers are fading. The race is wide open for everyone, but digital players are driving the change currently.
Will new platforms reshape the industry? Possibly… Does this mean “game over” for traditional service providers? Not at all… Established players can build upon long industry experience, strong brand power and broad value-chain coverage to develop their future unique selling points.
Digital pioneers, on the other hand, bring in cutting-edge technology, smart problem solving and agile structures to take on the fight.
Even though logistics service providers have lost their leading edge in certain areas, they continue to be in a strong position to come out as one of the few winners in this race.
One thing is for sure: consequent action is required to sail with the wind towards the safe shores and avoid declining into a niche position.
Sitting and waiting is not an option. Neither is a simple “me-too” approach. LSPs need to step up their games.
They must not be afraid of change, but of standstill, as their traditional operating models may not be required anymore in a not-so-distant future.
Digitization can be a severe threat for LSPs, but also their unique chance to secure leading market positions for years to come
Original Source: https://www.supplychain247.com/paper/digital_platforms_in_freight_transportation